Fwd: Three-way transaction, that I am not sure how to handle...

[Dawning Sky]

Forgot CC'ing to the list.

---------- Forwarded message ----------
From: Dawning Sky <the.dawning.sky at gmail.com>
Date: Sep 18, 2006 4:48 PM
Subject: Re: Three-way transaction, that I am not sure how to handle...
To: Robert Heller <heller at deepsoft.com>


On 9/18/06, Robert Heller <heller at deepsoft.com> wrote:
> I recently set myself up with a PayPal Debit card, which I am using to
> pay for recurring business expenses.  Because I also have a PayPal
> button on my web site, I am getting 1% cash back.
>
> I generally don't carry a balance on my PayPal account, so the funds are
> drawn from my (business) checking account as a 'backup funding source.
>
> Now what happens is this: PayPal performs three transations:
>
> 1) Pays the charge.
> 2) Transfers the needed amount from my checking account to cover the
> charge.
> 3) Awards the cash-back amount to the PayPal account.
>
> Right now, I have two regular transactions, a transfer from my checking
> account to the PayPal account and a transfer from the PayPal account to
> the payee (I have not put in a transaction for the cash back yet).
>
> Does it make any sense to bundle the whole transaction sequence as a
> split transaction?  Or should I just have three transactions? If the
> former, I am not totally sure what the split transaction will look like.

I'm no expert in accounting, but I suppose either way is fine.  The
"three-transaction" way is *probably* easier for gnucash to match the
transcations if you ever import downloaded transcations from paypal.
The "one-transaction" way probably has a cleaner looking, but
basically you just combine the six lines you'll have in the three
transactions into one transcation.

DS